Balancing the Blame

I know this fits the “rating agencies are the Devil” narrative in D.C., but a little balance is called for. If there was a failing in MF Global, it was in management and regulatory oversight. Management took the risk, and the blame lies with them.

Regulators are empowered to oversee the safety and soundness of regulated entities and are charged with intervening if there is a problem. Rating agencies observe this process as a third party.

Let’s have hearings and ask all three parties what they know and when they knew it.

Rating agencies publish ratings opinions.

Regulators monitor safety and soundness.

There is responsibility and blame to be assigned in this collapse. Let’s make sure it’s assigned to ALL responsible.

Congress Presses Rating Firms – The Wall Street Journal, January 5, 2012